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Sunday, 24 August 2014

MEDIA RELEASE: First home buyer grants welcomed in Hutt Valley

National’s candidates Lewis Holden and Chris Bishop have welcomed today’s announcement by the Prime Minister and Housing Minister to double the Government support for first home buyers.

“The package announced today will help more first home buyers in Hutt Valley achieve the dream of owning their own home over the next five years,” Mr Bishop says.

“In Hutt City, the new house price caps for the KiwiSaver HomeStart Grant and Welcome Home Loans schemes will be increased from $350,000 to $450,000.

That means many more people in Hutt City will be able to get government support when buying their first home.

“In Upper Hutt, the new house price caps for the KiwiSaver HomeStart Grant and Welcome Home Loans schemes will be increased from $300,000 to $450,000.This is great news for the people of Upper Hutt,” Mr Holden says.

The package comprises three changes:

Replacing the KiwiSaver First Home Deposit Subsidy with a HomeStart grant, doubling the support for buying a new home and increasing the house price caps;

Enabling larger KiwiSaver First Home Withdrawals by including the member’s tax credit (meaning first home buyers will now be able to withdraw all of their KiwiSaver savings except the $1000 kick-start);

Expanding eligibility for Welcome Home Loans by aligning the house price caps with the new KiwiSaver HomeStart grant.

“Nationally, we are roughly doubling the number of people receiving a Government grant to buy a first home from 10,000 per year to 20,000 per year, and doubling the Government grant they are eligible for if buying a newly-built home,” says Mr Holden and Mr Bishop.

In all, this new package will help about 90,000 lower and middle income first home buyers over the next five years.

“It will ensure that more New Zealanders are able to attain the dream of owning their own home.

“The intent of the package is also to increase the supply of new housing and to encourage housing companies to build homes in a price range that is affordable for first home buyers.

Currently, individual first home buyers are eligible for a grant of $3000 after three years in KiwiSaver, $4000 after four years and $5000 after five years.

Under HomeStart, this grant will double to $6000 after three years, $8000 after four years and $10,000 after five years for the purchase of a newly built home.

The changes to the KiwiSaver First Home Withdrawal in enabling access to the member’s tax credit will increase the maximum withdrawal amount by $512 per year for each year a member has contributed.

The KiwiSaver First Home Withdrawal is limited to members buying a first home, who have been contributing for a minimum of three years. The KiwiSaver HomeStart grant and Welcome Home Loans have additional criteria of people having an income below $80,000 for an individual and $120,000 for a couple, and the house being purchased must be below the regional house price caps.

The package will cost an additional $218 million over the next five years, and come into effect on 1 April 2015.

“HomeStart complements the wide programme of work the National Government already has underway to improve housing supply and affordability,” says Mr Holden and Mr Bishop.

“We are freeing up more land supply, reducing building material costs, reining in infrastructure and compliance costs and investing in sector skills and productivity.”